Bloomberg News

Robusta Coffee at 17-Month Low on Supply Prospects; Cocoa Drops

June 13, 2013

Robusta coffee fell for a fifth day in London to a 17 month-low, with speculators betting on lower prices just as dry weather helps speed the harvest in Indonesia and rainfall in Vietnam favors crop development. Cocoa slid.

Money managers more than tripled bets on falling prices of robusta coffee traded in London in the week ended June 4, NYSE Liffe data showed. Southern Sumatra, Indonesia’s main coffee-growing region, will get drier weather this week, favoring harvesting, MDA Weather Services in Gaithersburg, Maryland, said in a report on June 11. Vietnam’s main growing area of Dak Lak will get rain in the 10 days through June 20, the Meteorology and Hydrology Department forecast this week.

“Another round of beneficial rain was seen in the central highlands of Vietnam,” alleviating concerns about drought, Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. Robusta is falling on speculation supply will grow and as “hopes of increased Asian demand thus far have been slow to develop.”

Robusta coffee for September delivery retreated 1.7 percent to $1,749 a metric ton by 11:18 a.m. on NYSE Liffe in London. Earlier, the price fell to $1,741 a ton, the lowest for a most-active contract since Jan. 9, 2012. Arabica coffee for September delivery slid 0.4 percent to $1.24 a pound on ICE Futures U.S. in New York.

Futures trading volumes on ICE were more than triple the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

Money managers boosted their net-short positions, or wagers on a lower market, to 7,096 futures and options in the week ended June 4, the Commitments of Traders report published on the exchange’s website on June 10 showed. That compares with 2,029 contracts a week earlier and it’s the biggest net-short position since Jan. 17, 2012, exchange data on Bloomberg showed.

White, or refined, sugar for delivery in August added 0.4 percent to $477 a ton in London. Raw sugar for delivery in October was 0.2 percent higher at 16.61 cents a pound in New York.

Cocoa for delivery in July was down 2.1 percent at 1,516 pounds ($2,374) a ton on NYSE Liffe. Cocoa for September delivery was down 2.3 percent at $2,324 a ton on ICE.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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